First, on employees and pensioners, approximately 184,000 employees out of an elegible total of just over 230,000 responded to the matching offer by putting their own money into the company. Of these, more than 62,000 employees together with 25,000 BT pensioners applied for shares over and above the matching offer. I welcome this impressive commitment to BT's future by its own work force. Including those employees who have taken up the free offer alone, some 222,000 of all BT's employees—over 96 per cent. of those eligible — have become shareholders in the company.
Secondly, on the general public, we received more than 2 million applications for the 1,000 million shares available. Almost half of these applications were for 200 shares or 400 shares. The Government have decided to give priority to smaller applications, and all applications for 200 and 400 shares are therefore being met in full.
Applications for 800 and 1,200 shares will receive 500 and 600 shares respectively. Applicants for higher numbers up to a maximum of 100,000 shares will receive 800 shares. No allocation will be made to applicants for over 100,000 shares. As a result of these arrangements, BT commences its role as a public quoted company with very substantially more shareholders than any company in this country.
The arrangements for institutional priority applicants and overseas markets are as I told the House on 16 November. The offers of BT shares in Canada, Japan and the United States are now taking place.
British Telecom has now been sucessfully privatised. I am sure that hon. Members on both sides of the House will wish success to Sir George Jefferson, to BT's management and to its employees, who have shown, by their commitment to the company, their confidence in its future success.
Does the Minister realise that BT shares are now trading at 95p, a premium of 45p, or 90 per cent., on the 50p down payment? On this basis, does the Minister realise that the Government have presided over the biggest give away in British commercial history? Is the Minister aware of the assessment in today's Daily Telegraph that for every penny above the offer price at which the shares traded, the Government lose £30 million that they should have received? On this basis, has not today's so-called success for the Government meant giving, as a bonus to 2 million of us, £1,350 million that really belongs to all of us?
Is the hon. Gentleman really surprised that employees have accepted offers of two free shares for every share purchased?
When claiming success in attracting 2 million shareholders does not the hon. Gentleman realise that it is possible to sell almost anything at half price but that in this case it is taxpayers' assets that are being sold short?
No, I did not. I prophesied that it was under-priced from the start.
Why did not the Government try to head off the speculative hysteria that we have seen on the market today by transferring to the United Kingdom market the 400 million shares allocated to Japan, the United States of America and Canada, a solution that was available to them? Why, after all, should foreigners enjoy the double bonus of buying under-valued BT shares with undervalued £1 notes?
How did the Government's advisers get it so wrong? Before the launch the Opposition said that the Government would price it too low. How did the Government get it so wrong? It has been five times over-subscribed. A 45p premium is not miscalculation: it is criminal incompetence.
I seem to recall reading in the report of the proceedings of the Committee stage of the Bill several occasions when the Committee was told that no one would subscribe to this enterprise. It is well known that on these occasions the Opposition have two folders, one marked "rip-off' and the other marked "failure". They have taken out the "rip-off' folder today and are trying to suggest, for example, that 184,000 employee shareholders of British Telecom represent some kind of failure and, what is more, that we should have allocated more of the foreign shares to the domestic market. The right hon. Gentleman does not seem to appreciate that it was essential for the proper standing of this flotation to have a 13·7 per cent. allocation of shares to the international market.
On a day that has seen nearly 1 million small shareholders, who are not stags, deciding to invest their own money and 184,000 employees of British Telecom who have voted with their cheque books, I have to tell the right hon. Gentleman that this can only be seen as a massive gesture of defiance to the Labour party.
Does not my hon. Friend think that the investment in success by British Telecom employees is not only to be welcomed but to be considered at variance with their trade unions, which campaigned consistently against that investment? Will my hon. Friend also seek an assurance from the Opposition that no right hon. or hon. Member on their Benches invested in that success?
I congratulate my hon. Friend on this superb issue, which has brought into the property-owning democracy 1 million people who have not owned shares before. However, may I introduce one small fear? One million people have applied for shares, never having done so before, yet this morning I heard that many applications had been rejected because, instead of using the word "Yes" under
Telephone bill vouchers or share bonuses,
some people had put a tick in the box, showing clearly their assent to one or the other, and those have been called incorrect applications. Will my hon. Friend assure the House that there will be no rejections on this ground?
I cannot give my hon. Friend that assurance. The applications had to be strictly assessed and scrutinised. I assure my hon. Friend that I have looked again at the way in which applications were listed and the criteria that were set. If people were careful about filling in the application forms, they should not have made those mistakes.
Is the Minister aware that the test wall be not whether employees take free shares and cut-price shares but whether they keep those shares or sell them at the first opportunity? Is he also aware the employees feel that this offer of money for nothing is no compensation for the loss of job security that they will suffer under privatisation?
I do not know whether the hon. Gentleman is offering advice on whether employees ought to sell their shares. Individual retail subscribers were asked to say yes in the voucher box or the share bonus box. The vast proportion opted for share bonuses. As those will not be freely available for three years, that seems to suggest that people want to stay with the offer. I am sure that the vast majority will do so.
Has my hon. Friend noted that, on previous privatisation issues where shares have been left with the underwriters, the Opposition have derided the exercise as a flop, but on this occasion, when shares have been taken up enthusiastically by the public, the Opposition deride the exercise as a rip-off? Does my hon. Friend agree that, while there will inevitably be a shake-out in share ownership in favour of the institutions over the next few weeks, this privatisation marks a major increase in the number of shareholders in this country? In congratulating my hon. Friend, I am sure that all Conservative Members will also wish to thank our right hon. Friend the Member for Mole Valley (Mr. Baker), the former Minister for Information Technology, and our hon. Friend the Financial Secretary to the Treasury.
Will the Minister confirm that a rake-off of about £100 million has gone to City institutions that engaged in this casino-like exercise? Will he tell the House how many of the 3 million to 4 million on the dole sought to get hold of shares? Can he say why I and another 50 million-odd people who were shareholders are no longer shareholders but are expected to foot the bills? What advantage is there for the consumer in this exercise?
The advantage to the consumer is already becoming manifest, in improved performance by BT. Any consumer who has dealings with BT can see that the possibility of competition from Mercury has already had a dramatic effect on BT's consumer relations, because it knows that it no longer has art automatic monopoly. That will be to the benefit of consumers. As for shareholders, the advantage of having 1 million new shareholders ought to speak for itself.
Does my hon. Friend agree that the privatisation is the most massive leap in spreading real public ownership—by individual members of the public, which is the only effective public ownership—ever seen in our history? The fact that 184,000 employees have taken up shares is a big vote of confidence in the future of BT and a slap in the face for the Labour party, which is, yet again, out of touch with public opinion.
I am grateful to my hon. Friend. Despite what the Post Office unions and the Opposition said, 184,000 people have done something that they did not have to do and were not cajoled into doing. They took out their cheque books and made applications for the shareholding. They recognise, even if the Opposition do not, that this is a highly successful enterprise with which to be involved, and they wish it every success.
I take the hon. Gentleman's point, but, as I said earlier, a large proportion of people in that category have applied for share bonuses. As they have to hold shares for three years to qualify for those bonuses, it does not appear that the pattern suggested by the hon. Gentleman will develop.
Is my hon. Friend aware of the hypocrisy of the Labour party which, in the summer, was gleefully predicting a complete flop but which is now having to eat its words in the face of a remarkable success story? Will he consider with ministerial colleagues the implications of a new development in mass share flotation—a development for the first time of share shops within stores, and so on, which will bring home the realities and benefits of share ownership to a wide public for the first time?
Is the Minister aware that any old fool, including a Minister, can give away a national asset at half price? That is what has happened. How can the Government say to the country that they want to reduce student grants and raise water charges when at the same time they can afford to give away £1,000 million in speculative gains to City speculators? Should not that matter now be dealt with by the Committee of Public Accounts in so far as a full investigation is needed into the Government's negligence?
As I have had occasion to tell the hon. Gentleman before, in this case the real advantage to the nation is the possibility of over 1 million people being able to own shares in a great international public corporation. That is not giving things away.
In view of the carping and ignorant criticisms of the Opposition as a result of the successful share issue, will my hon. Friend take steps to put BT well out of the range of the doctrinaire renationalisers opposite by, in years to come, selling off a further percentage of the shares so that more trade unionists, workers and small shareholders can benefit?
Has the Minister no regret at all that he under-priced the shares, or is the truth that the whole thing was a massive bribe so that he could then pretend that wider shareholding had been achieved, although it will be only transitory? Ought he not to say that he regrets that so much money, belonging to the British public, has been given away through this enterprise?
No, certainly not. As several of my hon. Friends have pointed out, if the hon. Gentleman had been able to say that we had been left with a lot of shares on our hands—in other words if there had been a flop—he would have been rising to his feet saying that the House had been warned for months past that the issue would not go. Once the flotation is a success, the rip-off argument is used, and that is not the case.
I apologise, Mr. Speaker.
Is my hon. Friend aware that the hon. Member for Stoke-on-Trent, Central referred to selling off £3·5 billion worth of assets and in fact my hon. Friend has achieved £500 million more than the Labour party thought that he would fail to achieve?
I seem to remember that the hon. Member for Stoke-on-Trent, Central (Mr. Fisher) went on to say that nobody would want to buy the shares. He does not appear to be a great forecaster in such matters.
It is not a matter of being surprised. As the hon. Gentleman will know, if one makes a price, as we did on 15 November, we have to do so in the expectation of what might obtain in the intervening two and a half weeks. It is interesting to note that at that time commentators said that they thought that it was a fair price and that it was at the upper end of the expected range.
In congratulating my hon. Friend and my right hon. Friend the Chancellor on this great success in getting the money in, will he bear in mind that it might be a good idea, as a thank offering, to help the Secretary of State for Education and Science to deal with the minimum problem that he has on student grants out of the profits?
I had always thought that the people owned BT anyway, before it was given away by the Government. I am glad that mention has been made of the Minister for Local Government, the right hon. Member for Mole Valley (Mr. Baker), because on the same day as the Minister for Information Technology has given away £1,000 million of public money, we are to discuss a Bill that is supposed to save £100 million a year. In one day, one Minister has given away 10 years' savings that another Minister is trying to gain by destroying local government.
Although I congratulate my hon. Friend on this success, will he bear in mind for the future the fact that many smaller shareholders cannot deal in the shares, because, although they know the number that they may get, they cannot be certain until they receive their allotment letters? Will he bear that in mind for future privatisations?
My hon. Friend the Financial Secretary and I will note what my hon. Friend has said. My hon. Friend will be aware, of course, that all the applicants for 200 and 400 shares will receive their allotments in full, so by definition all of them—they number about 1 million —will know immediately.
As 95 per cent. of BT's employees have taken up shares, does that not knock on the head the allegation of the Post Office unions that the work force was opposed to the sale and, in turn, mean that the new privatised company will start life with one of the largest proportions of employee shareholders of any business in Western Europe? Indeed, should we not applaud the extent of wider share ownership that this privatisation has brought about?
For a start, we do not know that the offer price was wrong. There may well be buyers entering the market who are putting on pressure to see whether there are any sellers. However, for obvious reasons, there seem to be very few sellers at the moment. As I have said, on 15 November we had to make a judgment as to what a fair price was. Commentators thought that it was a fair price at that time, and so do we today.